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Amending what doesn’t need a-fixing?
Picking up the tab for the Government’s TVNZ Bill

PETER THOMPSON Senior Lecturer, Department of Communication Studies, Unitec Institute of Technology

The Bill amending the 2003 TVNZ Act is currently shuffling its way through Parliament. When enacted, it will have considerable significance for the broadcasting sector in new Zealand. The Bill abolishes the TVNZ Charter and replaces the problematic dual commercial/public remit by redesignating TVNZ as a television and digital media business with a predominantly commercial focus. It also makes provisions for TVNZ to screen pre-1989 programme archives, including “orphan” copyright material, access to which cannot be negotiated.

It is questionable whether abolishing the Charter does much to resolve the intrinsic contradiction of balancing commercial and public service imperatives. Interestingly, the Minister of Broadcasting sat on the National-led Commerce Select Committee that endorsed the revised version of the Charter, and the decision to abolish the Charter was never explicitly specified in National’s election manifesto.

Jonathan Coleman has suggested he wants to retain some sort of public service role for TVNZ’s ad-free Freeview channels, 6 and 7. But how they will fit into a commercially-focused set up with no Charter and no funding remains unclear. If TVNZ 6 and 7 are to maintain a public service function, then they need a clear set of operational principles and adequate funding. The Minister has previously argued that the Charter was too woolly, but section 12 of the Bill which ostensibly replaces the Charter could scarcely be more vague:

(1) The functions of TVNZ are to be a successful national television and
digital media company providing a range of content and services on a choice of delivery platforms and maintaining its commercial performance.

(2) In carrying out its functions, TVNZ must provide high quality content that (a) is relevant to, and enjoyed and valued by, New Zealand audiences; and (b) encom- passes both New Zealand and international content and reflects Maori perspectives.

(3) TVNZ’s services must include the provision of channels that are free of charge and available to audiences throughout New Zealand.

There is little in these specifications to distinguish TVNZ from any other free-to-air commercial broadcaster, much less provide a coherent direction for two public service channels contained within a commercial broadcaster.

Meanwhile, the modest government subsidy of TVNZ 6 and 7 expires next year. National has already redirected the Charter funding (which, crucially, was never ringfenced in the 2003 TVNZ Act) to NZ On Air’s new contestable Platinum Fund. The fund’s distinction between mainstream and public service local content is important, but currently 6 & 7 are not eligible for it. Without adequate public funding, the distinctive non-commercial schedules of these channels are simply not sustainable. But as with his handling of Radio New Zealand, the Minister seems disinclined to challenge cabinet colleagues for the funds required to sustain his portfolio, or to contemplate possibilities for alternative funding mechanisms.

It is problematic to require TV One and TV2 to operate commercially and expect them cross-subsidise 6 and 7, whether directly or through a return of dividends. This would entail contradictory operational priorities and risk reinstating the confusing money-go-round and inconsistent expectations that contributed to the failure of the Charter set-up under Labour. Bolting on these functions after the Bill is enacted will reproduce precisely the dual remit tension that the amendment purports to resolve.

Another option reportedly mooted was the reclamation of Platinum Fund money. However, this would generate opposition from the vested interests which have lobbied successfully against direct broadcaster-specific funding. However, after the Bill is enacted, the producers interested in making the type of programmes eligible for the Platinum Fund are likely to encounter increasing difficulty finding a broadcaster interested in screening such content in prime time. A commercially reinvigorated TVNZ will intensify competition for ratings and revenue across the entire recession-hit television sector.

The essential problem is that the government is itself unclear about the broadcasting outcomes it really wants. If the Minister genuinely values public service, his alternatives have been circumscribed by more senior cabinet colleagues ideologically or fiscally hostile to such principles.
Nevertheless, abolishing the Charter before deciding what role is desired for TVNZ 6 and 7 is surely putting the cart before the horse. If all the government wants from TVNZ is a commercial dividend, then they might as well turn TVNZ back into a state-owned enterprise.
But if the importance of public service outcomes is recognised, then these need to be specified and funded commensurately. In its current formulation, the Amendment Bill is inadequate for the purposes of either option. It is little more than an expedient compromise coupled with a cavalier political disregard for the public good.

In contrast, the archived works section of the bill appears to be a practical solution to the legal grey area pertaining to the copyright of older programming. The BCNZ archives provide no social or economic benefit to anyone while they lie unused, gathering dust. It therefore makes sense to permit TVNZ to utilise that content as a default, with the rights holders being compensated if and when they are identified.

It is difficult to discern any obvious disadvantage for any party here, although there may be contestation of technical interpretations and rights to compensation. It is unclear exactly how much this scheme will cost in practice (the compensation fund must allow for a notional $300 per half hour of content screened). One potential complexity concerns the manner in which TVNZ might gain a commercial benefit from using archival material, and whether any revenue generated is proportional to the compensation any rights holders receive.
Under part 4A of the Bill, section 29A indicates that: “‘archived’ work means a programme made by or on behalf of the Broadcasting Corporation of New Zealand or its predecessors on or at any time before 27 May 1989 and held in the TVNZ Archive, and includes an archived work that comprises a series of episodes.”

Meanwhile, section 29C indicates that TVNZ may screen an archived work on as many occasions as it considers appropriate, but only on TVNZ channels or else through arrangement with Maori TV or NZ On Screen. Significantly, under this section, the archived work must be screened free of charge (although generation of commercial revenue is not explicitly precluded).

TVNZ’s controversial decision to place its new Heartland channel on Sky’s platform raises some intriguing questions here. Were it not for the word “include” in the revised Section 12 point 3, the provision of such a service on a pay-TV platform would not be permitted because it would contravene the universal service requirement. Meanwhile, section 29C appears to indicate that TVNZ would be prohibited from showing any
pre-1989 programme on Heartland because it is not available free of charge. If so, it is far from clear where else TVNZ would screen such material.

Sky’s John Fellett was quoted describing the 50 years of content in TVNZ’s vault as the “biggest untapped resource since the Maui oil fields”.

Depending on the legal interpretation of 29C, anything pre-1989 might be staying untapped! Considering the government’s acquiescence to Sky’s lobbying when it canned the Review of Regulation, and its eagerness to dump the Charter and usher in a new commercial era for TVNZ, it would be ironic if the inadvertent consequence of the TVNZ Amendment Bill was to prevent either broadcaster from profiting from it.